Do you know why the SEC and the US Attorney General is busy with International bribery and counterfeiting while unable to bring tens of trillions of dollars back to American citizens? Because US law is now about protecting corporate profits and fair corporate competition.....forget the public justice! One company bribing a government gives unfair advantage! Shame!

from the Securites and Exchange Commission (SEC) The Securities and Exchange Commission today charged global food processor Archer-Daniels-Midland Company (ADM) for failing to prevent illicit payments made by foreign subsidiaries to Ukrainian government officials in violation of the Foreign Corrupt Practices Act (FCPA). An SEC investigation found that ADM’s subsidiaries in Germany and Ukraine paid $21 million in bribes through intermediaries to secure the release of value-added tax (VAT) refunds.Follow up: The payments were then concealed by improperly recording the transactions in accounting records as insurance premiums and other purported business expenses. ADM had insufficient anti-bribery compliance controls and made approximately $33 million in illegal profits as a result of the bribery by its subsidiaries. ADM, which is based in Decatur, Ill., has agreed to pay more than $36 million to settle the SEC’s charges. In a parallel action, the U.S. Department of Justice today announced a non-prosecution agreement with ADM and criminal charges against an ADM subsidiary that has agreed to pay $17.8 million in criminal fines. Per Gerald Hodgkins, SEC's Division of Enforcement Associate Director:ADM’s lackluster anti-bribery controls enabled its subsidiaries to get preferential refund treatment by paying off foreign government officials. Companies with worldwide operations must ensure their compliance is vigilant across the globe and their transactions are recorded truthfully. According to the SEC’s complaint filed in U.S. District Court for the Central District of Illinois, the bribery occurred from 2002 to 2008. Ukraine imposed a 20 percent VAT on goods purchased in its country. If the goods were exported, the exporter could apply for a refund of the VAT already paid to the government on those goods. However, at times the Ukrainian government delayed paying VAT refunds it owed or did not make any refund payments at all. On these occasions, the outstanding amount of VAT refunds owed to ADM’s Ukraine affiliate reached as high as $46 million. The SEC alleges that in order to obtain the VAT refunds that the Ukraine government was withholding, ADM’s subsidiaries in Germany and Ukraine devised several schemes to bribe Ukraine government officials to release the money. The bribes paid were generally 18 to 20 percent of the corresponding VAT refunds. For example, the subsidiaries artificially inflated commodities contracts with a Ukrainian shipping company to provide bribe payments to government officials. In another scheme, the subsidiaries created phony insurance contracts with an insurance company that included false premiums passed on to Ukraine government officials. The misconduct went unchecked by ADM for several years because of its deficient and decentralized system of FCPA oversight over subsidiaries in Germany and Ukraine. The SEC’s complaint charges ADM with violating Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934. ADM consented to the entry of a final judgment ordering the company to pay disgorgement of $33,342,012 plus prejudgment interest of $3,125,354. The final judgment also permanently enjoins ADM from violating those sections of the Exchange Act, and requires the company to report on its FCPA compliance efforts for a three-year period. The settlement is subject to court approval. The SEC took into account ADM’s cooperation and significant remedial measures, including self-reporting the matter, implementing a comprehensive new compliance program throughout its operations, and terminating employees involved in the misconduct. The SEC’s investigation was conducted by Nicholas A. Brady and supervised by Moira T. Roberts and Anita B. Bandy. The SEC appreciates the assistance of the Justice Department’s Fraud Section and the Federal Bureau of Investigation.

____________________________________________________________________Merrill Lynch was filled with all that is subprime loan and fraudulent stock deals and as we see with the most recent settlement------the fines are small and there is no admission of guilt. There are no damages to the public included as the only protections are being given to the investors. This happens because of who Obama and neo-liberals appoint as head of SEC. It also happens because of Federal law that caps the awards from fraud to a minimum. MARYLAND STATE LAW DOES THE SAME. SINCE THE CRASH AND THE OUTRAGEOUS SETTLEMENTS NO LAWS HAVE CHANGED TO MAKE PROSECUTION EASIER-----STRONGLY WRITTEN FRAUD LAWS------AND HIGHER PENALTIES.

Having New York State in charge of setting penalties for Wall Street banks with individual states having no way to assess higher fines in many cases needs to change! Know how a state seeks justice for its citizens------DO NOT ALLOW THE BANK ACTING CRIMINALLY DO BUSINESS IN THE STATE!

from the Securities Exchange Commission (SEC) Firm Agrees to $131 Million Settlement The Securities and Exchange Commission today charged Merrill Lynch with making faulty disclosures about collateral selection for two collateralized debt obligations (CDO) that it structured and marketed to investors, and maintaining inaccurate books and records for a third CDO.Follow up: Merrill Lynch agreed to pay $131.8 million to settle the SEC’s charges. The SEC’s order instituting settled administrative proceedings finds that Merrill Lynch failed to inform investors that hedge fund firm Magnetar Capital LLC had a third-party role and exercised significant influence over the selection of collateral for the CDOs entitled Octans I CDO Ltd. and Norma CDO I Ltd. Magnetar bought the equity in the CDOs and its interests were not necessarily aligned with those of other investors because it hedged its equity positions by shorting against the CDOs.“Merrill Lynch marketed complex CDO investments using misleading materials that portrayed an independent process for collateral selection that was in the best interests of long-term debt investors,” said George S. Canellos, co-director of the SEC’s Division of Enforcement. “Investors did not have the benefit of knowing that a prominent hedge fund firm with its own interests was heavily involved behind the scenes in selecting the underlying portfolios.” According to the SEC’s order, Merrill Lynch engaged in the misconduct in 2006 and 2007, when its CDO group was a leading arranger of structured product CDOs. After four Merrill Lynch representatives met with a Magnetar representative in May 2006, an internal email explained the arrangement as “we pick mutually agreeable [collateral] managers to work with, Magnetar plays a significant role in the structure and composition of the portfolio ... and in return [Magnetar] retain[s] the equity class and we distribute the debt.” The email noted they agreed in principle to do a series of deals with largely synthetic collateral and a short list of collateral managers. The equity piece of a CDO transaction is typically the hardest to sell and the greatest impediment to closing a CDO. Magnetar’s willingness to buy the equity in a series of CDOs therefore gave the firm substantial leverage to influence portfolio composition. According to the SEC’s order, Magnetar had a contractual right to object to the inclusion of collateral in the Octans I CDO selected by the supposedly independent collateral manager Harding Advisory LLC during the warehouse phase that precedes the closing of a CDO. Merrill Lynch, Harding, and Magnetar had finalized a tri-party warehouse agreement that was sent to outside counsel, yet the disclosure that Merrill Lynch provided to investors incorrectly stated that the warehouse agreement was only between Merrill Lynch and Harding. The SEC has charged Harding and its owner with fraud for accommodating trades requested by Magnetar despite its interests not necessarily aligning with the debt investors. The SEC’s order finds that one-third of the assets for the portfolio underlying the Norma CDO were acquired during the warehouse phase by Magnetar rather than by the designated collateral manager NIR Capital Management LLC. NIR initially was unaware of Magnetar’s purchases, but eventually accepted them and allowed Magnetar to exercise approval rights over certain other assets for the Norma CDO. The disclosure that Merrill Lynch provided to investors incorrectly stated that the collateral would consist of a portfolio selected by NIR. Merrill Lynch also failed to disclose in marketing materials that the CDO gave Magnetar a $35.5 million discount on its equity investment and separately made a $4.5 million payment to the firm that was referred to as a “sourcing fee.” The SEC also today announced charges against two managing partners of NIR. According to the SEC’s order, Merrill Lynch violated books-and-records requirements in another CDO called Auriga CDO Ltd., which was managed by one of its affiliates. As it did in the Octans I and Norma CDO deals, Merrill Lynch agreed to pay Magnetar interest or returns accumulated on the warehoused assets of the Auriga CDO, a type of payment known as “carry.” To benefit itself, however, Merrill Lynch improperly avoided recording many of the warehoused trades at the time they occurred, and delayed recording those trades. Therefore, Merrill Lynch’s obligation to pay carry was delayed until after the pricing of the Auriga CDO when it became reasonably clear that the trades would be included in the portfolio. “Keeping adequate books and records is not an elective requirement of the federal securities laws, and broker-dealers who fail to properly record transactions will be held accountable for their violations,” said Andrew M. Calamari, director of the SEC’s New York Regional Office. Merrill Lynch consented to the entry of the order finding that it willfully violated Sections 17(a)(2) and (3) of the Securities Act of 1933 and Section 17(a)(1) of the Securities Exchange Act of 1934 and Rule 17a-3(a)(2). The firm agreed to pay disgorgement of $56,286,000, prejudgment interest of $19,228,027, and a penalty of $56,286,000. Without admitting or denying the SEC’s findings, Merrill Lynch agreed to a censure and is required to cease and desist from future violations of these sections of the Securities Act and Securities Exchange Act. The SEC’s investigation was conducted by staff in the New York Regional Office and the Complex Financial Instruments Unit, including Steven Rawlings, Gerald Gross, Tony Frouge, Elisabeth Goot, Brenda Chang, John Murray, Sharon Bryant, Kapil Agrawal, Douglas Smith, Howard Fischer, Daniel Walfish, and Joshua Pater. Several examiners in the New York office assisted, including Edward Moy, Luis Casais, Thomas Shupe, William Delmage, George DeAngelis, Syed Husain, and James Sawicki._____________________________________________________________________________For instance, the SEC said that "bad actors" — including felons convicted of a crime involving the sale of securities — won't be able to participate in these securities offerings. But that's only if those disqualifying acts occur after the new rules take effect. If crimes or other prohibited acts happened earlier, the information only has to be disclosed to investors."Who writes a rule that weak?" Roper said. "It boggles the mind."This is just another step for the financial industry and against consumer protection. It is breaking yet another depression era law put in place to control banks!

Everyone knows by now Obama is a neo-liberal working for corporate profits and wealth not for the people who elected him. Neo-liberals are just like republicans and so not only was it ne0o-liberals Clinton who broke the last round of banking laws that unleashed the Wall Street we have today...Obama is following in Clinton's example by being to the right of Bush on all things Wall Street friendly. We have watched as Obama appointed the same people who caused this crippled, criminal, and corrupt financial system, we have watched as his Justice Department ignores tens of trillions in corporate fraud, and we watch as he tried to negotiate Trade Agreements that are a COUP on the US Constitution and the citizens rights to legislate all for corporate profit.All of this can be reversed but democrats have to be aware that their party is captured by corporate neo-liberals. So, do not allow the DNC to choose your candidates and primary all incumbent democrats....Maryland is all neo-liberal. Run and vote for labor and justice whether you are republican or democrat. Republican voters need to know that their pols are just as corporate-captured!

By Eileen Ambrose, The Baltimore Sun 6:32 p.m. EDT, July 15, 2013 Coming this fall: advertisements pitching the opportunity to buy into hedge funds, private equity funds or early-stage companies. The Securities and Exchange Commission lifted last week a Depression-era ban against private companies advertising the sale of securities that don't have to be registered with regulators. That rule had been put in place to protect investors because such securities are considered a riskier investment. Many entrepreneurs and young companies hailed the regulatory move, which will allow them to raise capital by pitching private offerings through tweets, email, print ads or other outlets."It's fantastic," said Adam Lehman, president of Lotame, a data management company in Columbia that has raised several rounds of venture capital. The old rules, he said, "have been completely out of date and impractical." But consumer advocates, and even some entrepreneurs, are concerned that some investors won't fully understand the risks of investing in these private offerings and get burned. Or worse, advocates warn, investors might fall for schemes by con artists posing as entrepreneurs. Melanie Senter Lubin, Maryland's securities commissioner, warned that con artists may use the news of the SEC changes to immediately start advertising bogus securities to consumers. Under the SEC rules, companies raising capital through ads can only sell securities to investors with a certain amount of assets or income, a sign that individuals are sophisticated enough to know what they are getting into — or at least can weather a loss. The regulations are likely to take effect in September. The SEC's move is the result of the Jumpstart Our Business Startups — or JOBS — Act, a bipartisan law passed last year aimed at loosening restrictions for businesses raising capital. The hope is that these companies will use the money to create jobs. Eventually, the SEC is expected to issue regulations allowing even small investors to buy a stake in a private company through so-called crowdfunding. But for now, these latest SEC rules deal with only high-net-worth individuals. Businesses will be able to advertise private offerings to the general public, although they are supposed to take "reasonable steps" to ensure that only "accredited" investors participate. Accredited investors must have a net worth of more than $1 million, excluding a primary residence; or an annual income of more than $200,000 if they're single and $300,000 if they've been married the past two years and expected to maintain that income level. The new rules will level the playing field for investors, said Lotame's Lehman. Today, well-established institutional investors are in the loop about which private companies are raising money, he said. But accredited individual investors don't necessarily have access to that information. "There are very few channels that you can get good information about private investment opportunities," Lehman said. Lehman said this means of raising capital will likely be used by early-stage companies seeking their initial rounds of financing. "If we were starting the company again, it's absolutely something we would look at," he said. Matt Koll, co-founder of 410 Labs in Baltimore, said the new advertising rule will help some deserving companies that have had a hard time raising cash. "It will do what it's intended to do. That's a good thing," he said. But 410 Labs, which offers a software program to help sort email, won't be trying to lure a broad array of investors this way, Koll added. The 3-year-old company wants investors who bring value, such as advice and connections that can help with subsequent fundraising down the road, Koll said. "I'm concerned about the opening of the door to unscrupulous people who may take advantage of this," he added. Jason Hardebeck, executive director of the Greater Baltimore Technology Council, favors the new rules, saying young companies could attract investors who have been sitting on the sidelines. But Hardebeck worries that many investors will be disappointed, not fully understanding the investments or how difficult it may be to resell them because they aren't sold on public markets. And once an investor is burned, he said, "you lose them forever." Entrepreneurs and consumer advocates agree that being accredited doesn't guarantee individuals are sophisticated investors who understand the risks with young companies. "Most startup companies fail. There is a reason they aren't public companies yet," said Barbara Roper, director of investor protection with the Consumer Federation of America. They don't meet the standards for a public company, including independent boards and audited financial statements, she said. The new SEC rules offer some investor protections, but they don't go far enough, Roper said. For instance, the SEC said that "bad actors" — including felons convicted of a crime involving the sale of securities — won't be able to participate in these securities offerings. But that's only if those disqualifying acts occur after the new rules take effect. If crimes or other prohibited acts happened earlier, the information only has to be disclosed to investors. "Who writes a rule that weak?" Roper said. "It boggles the mind." Lubin, Maryland's securities commissioner, advises consumers to check with her office at 410-576-7048 before investing to see whether the regulator has information on the issuer, principals or salespeople._________________________________________________________________________Keep in mind that this condition in the muni-market has been around for decades.......imagine how much money was lost by the average investor with these manipulations. Is it illegal for these guys to lie? YES!!!!! You cannot sell a car saying it has 80,000 miles when it has 200,000.....you get sued!!!

Edelman, who has been named by Barron’s as the top independent advisor in the nation in three of the last four years, said too often brokers make the following errors of omission and commission in dealing with would-be retail muni bond purchasers:

• Brokers frequently don’t tell retail investors they can negotiate for yield and spreads on muni bonds. • Brokers also often don’t let a consumer know that a better price may be available from a competitor. • Sometimes brokers tell a retail investor that the value of the bond is guaranteed, leading the consumer to think he or she can sell the bond at any time for the original purchase price.

“At end of day retail investors are being lied to," Edelman said.

Municipal Securities Rulemaking Board Executive Director Lynnette Kelly told the roundtable at the SEC’s Washington headquarters that the MSRB is studying whether to impose a best-execution rule for the municipal securities market.

She added the regulator may enhance its Electronic Market Access System (EMMA) municipal bond disclosure Web site by improving post-trade transparency and eventually pre-trade transparency.

The first step toward creating what she referred to as “EMMA 2.0” is having conversations about adding yield curves to the database.

SEC Chairman Mary Jo White said she is concerned retail investors are getting worse prices than they should be.

Echoing her worry that institutional investors have an unfair advantage in muni pricing, Commissioner Elisse Walter said, “The more I look at it, the more concern I have about fairness.”

Vanguard Group Fixed Income Group Head Robert Auwaerter cautioned that providing more information may not lead to gains for retail investors. “Pricing muni bonds art, not a science,” he said.

He added that one proposal, giving retail investors more up-to-date information from alternative trading systems, could be misleading because sometimes brokers will post low-ball bids and offers to try help to determine what the true market appetite is for a thinly traded municipal bond.

Retail investors directly hold about 50 percent of the U.S. $3.7 trillion municipal bonds outstanding and another 25 percent indirectly. The corporate debt market, which is much more heavily reliant on large investors, has a value close to $15 trillion.__________________________________________________________________________Raise your hand if you expect a democratic President and Senate majority to appoint a tough on Wall Street person for the SEC........that's right, all democratic voters. So how did we get Mary Jo with no questions asked? That's right, Third Way corporate democrats working for wealth and corporate profits lead the democratic party. RUN AND VOTE LABOR AND JUSTICE NEXT ELECTIONS!!

The Senate Banking Committee's confirmation hearing for Mary Jo White has concluded after less than two hours. The senators didn't ask her any tough questions, showing great deference without probing too deeply.It seems clear that White's nomination to lead the Securities and Exchange Commission will sail through the Senate. In addition to White, the committee also heard today from Richard Cordray, who has been renominated to lead the Consumer Financial Protection Bureau. That meant less time for questions for White. Even Democratic Senator Elizabeth Warren of Massachusetts -- who has become a YouTube sensation for her recent grillings of banking and securities regulators -- threw only softballs. About Jonathan Weil» Jonathan Weil joined Bloomberg News as a columnist in 2007, and his columns on finance and accounting won Best ... MORE It's too bad the lawmakers chose not to deeply scrutinize White's ties to Wall Street banks, or the well-chronicled conflicts of interest that arise from her work and her financial interests as a partner at the New York law firm Debevoise & Plimpton. Doing so, before the Senate votes on her confirmation, would have been a public service. But that's not what the senators decided to make a priority. When he nominated White in January, President Barack Obama said: "You don't want to mess with Mary Jo." The committee members took his advice.White will have to earn the investing public's trust, and here's hoping she does. The SEC surely needs it.(Jonathan Weil is a Bloomberg View ___________________________________________________________________________________POGO Sticks It to the SEC

Danielle Brian, Executive Director of the Project On Government Oversight. (Photo: Project On Government Oversight / Flickr)In our last episode of that ongoing Washington soap opera, “As the Door Revolves,” we introduced you to former federal prosecutor Mary Jo White, pursuer of drug lords and terrorists, who left government to become a hot shot Wall Street lawyer defending such corporate giants as JPMorgan Chase, UBS, General Electric and Microsoft. Oh yes — and former Goldman Sachs board member Rajat Gupta, currently appealing his insider trading conviction.The New York Times reports that White and her husband, who’s also a corporate litigator, have a net worth of at least $16 million and investments that might be valued as high as $35 million. Now, courtesy of President Obama, Mary Jo White’s been named to head the SEC, the Securities and Exchange Commission — the very agency that regulates her clients and everyone else doing business in the stock market. But as they say on late night TV, wait — there’s more! Join us for our latest episode of “As the Door Revolves” in which the door spins even faster between the SEC and big business. According to a major new report from the nonpartisan watchdog POGO – the Project on Government Oversight — hundreds of the agency’s former employees have done or are doing business with the SEC on behalf of the corporations the agency is supposed to regulate. Imagine — hundreds with an intimate knowledge of how the place works advocating for their clients with friends at the SEC — colleagues who themselves may be looking for a big payoff when they, too, leave government. From 2001 through 2010, 419 SEC alumni filed nearly 2,000 disclosure forms saying they would be representing companies or individuals coming before the commission. And that’s only the “tip of the iceberg,” POGO says, “Because former SEC employees are required to file them only during the first two years after they leave the agency.” In other words, after that first couple of years there are no official records kept so we can’t know how vast the problem is or even how far back it goes. However, POGO writes, “Former employees of the Securities and Exchange Commission routinely help corporations try to influence S.E.C. rule-making, counter the agency’s investigations of suspected wrongdoing, soften the blow of S.E.C. enforcement actions, block shareholder proposals and win exemptions from federal law.” No wonder the SEC has granted special waivers to business on some 350 occasions that, according to the report, “softened the blow of enforcement actions.” What’s more, a year ago, The New York Times reported that “Close to half of the waivers went to repeat offenders — Wall Street firms that had settled previous fraud charges by agreeing never again to violate the very laws that the SEC was now saying that they had broken.” The plot thickens, or in this case, sickens. POGO also notes that in three instances — from 2008-2012 — when there were cases against UBS, the Swiss investment bank retained ex-SEC attorneys to argue on its behalf and was, in the words of the Times, “granted relief.” And when Obama’s first SEC chair, Mary Schapiro, pushed for reform of the $2.6 trillion money markets business, it was lobbied against by at least half a dozen former SEC staffers, and opposed by the two Republicans on the commission and one Democrat, Luis Aguilar, who used to be an executive vice president with the money management firm Invesco. The POGO report says that shortly after “Invesco sent a team to meet with Aguilar at the SEC and tell him why tightening rules for money market funds was a bad idea,” he came out against Schapiro’s plan, Coincidence? Aguilar told POGO there’s no connection. Sure. When George W. Bush was president and named Chris Cox to run the SEC, we screamed like bloody murder, because Cox had been a partner at a huge global law firm whose client list included Deutsche Bank and Goldman Sachs. Now Obama’s pushing his choices through that same revolving door. It’s called “regulatory capture” — the takeover of government agencies by the very corporations they’re supposed to keep an eye on, to protect everyone’s investments and pensions against abuses of private power. What’s next? Stay tuned. In the next few weeks, Mary Jo White will sit for her confirmation hearing and doubtless will be asked all about this by a committee stacked with politicians whose big donors include… the financial industry. You can read the complete POGO report here. Forward it to your own Member of Congress, then open your window and scream.______________________________________________________________________If you look at the Consumer Financial Protection Bureau you will see an agency that writes rules in a way to protect corporations from bad citizens but writes rules that keep citizens from being able to prosecute and penalize bad corporations. This is Elizabeth Warren's Agency that is writing laws that keep us from holding corporate fraud accountable. Those who think this new SEC is a sheriff working to keep the public safe remember.....her job is to protect corporate profits so if a defrauding business stands to lose money in a public lawsuit, she is tasked with protecting shareholder wealth. That is why there are NO LAWS WRITTEN YET THAT DEFINES FRAUD, RAISES CAPS ON FRAUD AWARDS, GIVES LOCAL JURISDICTIONS THE RIGHT TO PROSECUTE FRAUD, AND THE STAFF TO ACTUALLY INVESTIGATE.Wall Street’s in Good Hands with Mary Jo White

By Stephen Lendman on January 25, 2013 5:30 pm On January 24, Obama nominated Mary Jo White as SEC head. “You don’t want to mess with Mary Jo,” he said. Others have different views. More about her below.Washington is Wall Street occupied territory. Regulatory oversight is absent. Earlier New Deal reforms are gone.The Securities and Exchange Act of 1934 followed the Securities Act of 1933. Under the Constitution’s interstate commerce clause, it required offers and security sales to be registered. State “blue sky laws” previously governed them.The 1934 law regulated secondary trading of financial securities. It established the SEC under Section 4 to enforce the new act.Later came the 1939 Trust Indenture Act, the 1940 Investment Company Act, the same year Investment Advisors Act, Sarbanes-Oxley in 2002, the 2006 Credit Rating Agency Reform Act, and Dodd-Frank in 2010.SEC regulators long ago abandoned their mandate. The agency was established to enforce federal securities laws, the security industry, the nation’s financial and options exchanges, and other electronic securities markets and instruments.In the 1930s, they were unknown. They include derivatives and other forms of speculation. In principle, SEC is charged with uncovering wrongdoing, assuring investors aren’t swindled, and keeping the nation’s financial markets free from fraud and other abuses.For decades, it’s been weak-kneed. Under George Bush, it was more facilitator than enforcer. It’s a paper tiger. It abandoned the public trust. It operates the same way under Obama. It • turns a blind eye to fraud and abuse; • protects Wall Street, not investors; • neutered its enforcement staff’s authority; • adopted voluntary regulation; and • lets investment banks hold less reserve capital, as well as freely use leverage speculatively.Wall Street gets a free hand. Major banks take full advantage. They do what they please. They operate with impunity. They do it the old-fashioned way. They make money by stealing it. Their business model is fraud and grand theft.They transformed America into an unprecedented money making racket. They function more like a crime family than business.They manipulate markets. They front-run them. They pump and dump. Doing so artificially inflates security prices.They profit in up and down markets. They scam investors. They bribe politicians. Their officials infest Washington.At most, they get occasional wrist slaps. Fines imposed are pocket change. Prosecutions don’t follow. Mega-crooks are free to keep stealing. They take full advantage.Mary Schapiro was SEC head from January 2009 – December 2012. She’s a consummate insider. She spent years promoting self-regulation.She formerly headed the National Association of Securities Dealers’ (NASD). She ran the Commodity Futures Trading Commission. Her expertise includes quashing fraud investigations.She took full advantage in subordinate SEC positions under Reagan, Bush I and II. She did the same for Obama as agency head.The Wall Street Journal noticed. It said her regulatory record showed she “infrequently pursued tough action against big Wall Street firms.”Expect Mary Jo White to operate the same way. She’s a consummate insider. She’s considered safe. Why else would Obama choose her? He’s beholden to Wall Street. Money power owns him.On January 24, a Wall Street Journal editorial headlined “Political Regulators.” It commented on White’s appointment.Media scoundrels call her a tough prosecutor. She “stood up to terrorists and mobsters.” Can she “do the same for Wall Street?”“(W)e remember cases when she wasn’t so tough.” The 1996 Clinton-Gore campaign-finance scandal was one of many.She asked Congress to “back off its probe of the AFL-CIO’s Rich Trumka.” At issue was compromising her own investigation, she said. It was more whitewash than scrutiny of wrongdoing.White targeted small players. “None of this bodes well” going forward, said the Journal.“The media’s Obama Protection Club may consider us rude for bringing all this up, but then a little scrutiny might make Ms. White more likely to resist Democrat pressure for politicized law enforcement.”White is Wall Street’s new enabler-in-chief designee. She’s the first former prosecutor to head SEC. As US attorney for the Southern District of New York, she prosecuted alleged terrorists and crime bosses. She got Mafia boss John Gotti convicted of murder and racketeering.Occasionally she targeted small Wall Street players. She didn’t lay a glove on big ones. She’s a former Nasdaq director.She currently heads Debevoise & Plimpton’s litigation department. It’s a New York-based international law firm. It serves corporate clients. Its Wall Street ones include a rogue’s gallery of white collar crooks.JP Morgan Chase, Goldman Sachs, Deutsche Bank, HSBC, UBS and Bank of America among others are represented.White defended B of A’s former head, Ken Lewis. Until stepping down in September 2009, he was Bank of America chairman, president and CEO. He reflects the worst of Wall Street crooks. He’s got lots of company.White’s husband, John White, represents an obvious conflict of interest. He formerly headed SEC’s corporate finance section. He’s now at Cravath, Swaine & Moore. It’s a prominent New York law firm. White lobbies against regulation.It hardly matters. Getting tough on crime isn’t Mary Jo’s mandate. Too big to fail means too big to jail.Expect no change on White’s watch. She profiteers from revolving door politics. Her government positions got her high-paying private sector jobs. She’s part of the corrupt system.Expect business as usual at SEC. As top regulatory cop, she’ll take full advantage. Her predecessors did the same. Whitewashing crime in the suites pays. Lucrative private sector jobs follow government service.White will be better than ever rewarded when she leaves. She knows the game and plays it. She did it before. She’ll do it again. Career prospects depend on it.Matt Taibbi addressed what goes on. He headlined his Rolling Stone article “Why Isn’t Wall Street in Jail?”Corporate bosses aren’t prosecuted. “Nobody goes to jail.” Nobody except occasional minor players. “(F)ederal regulators and prosecutors (let) banks and finance companies” get off easy.Whitewash is policy. A “mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, (it’s become) a highly effective mechanism for protecting” them.Taibbi quoted former SEC chief accountant Lynn Turner saying:“I think you’ve got a wrong assumption – that we even have a law enforcement agency when it comes to Wall Street.”Open and shut cases are whitewashed. Others are placed in a “deal with later” file. Later never arrives. The most high-profile cases get “gummed up in the works, and high-ranking executives” get off scot-free.It’s standard practice for Wall Street. The Street’s biggest crooks aren’t touched. They’re free to steal again. Crime pays. Regulators cash in.“The Revolving Door isn’t just a footnote in financial law enforcement,” said Taibbi. “Over the past decade, more than a dozen high-ranking SEC officials (took) lucrative jobs at Wall Street banks or white-shoe law firms.”Partnerships are worth millions. Banks pay top executives multiples more. “All of this paints a disturbing picture.” It reflects a “closed corrupt system.”Powerful interests get their way. Obama’s no different from Bush and earlier presidents. He allocated “massive amounts of federal resources” going after the wrong people.“So there you have it. (Undocumented) immigrants: 393,000. Lying moms: one. Bankers: zero. The math makes sense because the politics are obvious.”Winning elections and profiteering out of office depend on “bang(ing) on the jailable class.” Innocent people fill prisons. Others committed misdemeanors too minor to matter.Steal “a billion” and stay free to steal more. It’s the American way. White’s job is seeing nothing changes. Accounting Today warned us, saying:In February 2012, she addressed a New York University School of Law forum. Prosecutors must not “fail to distinguish what is actually criminal and what is just mistaken behavior, what is even reckless risk-taking, and not bow to the frenzy,” she said.At Debevoise & Plimpton, she represented some of Wall Street’s worst. She’ll do likewise at SEC. She’s part of the system. She’s safe. She won’t disappoint.Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net.His new book is titled “Banker Occupation: Waging Financial War on Humanity.”http://www.claritypress.com/LendmanII.htmlVisit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

__________________________________________________________________________PLEASE FOLLOW THESE DECISIONS TO SEE NOT ONLY WHO THE CULPRITS ARE BUT WHO AND WHAT THE SEC IS HOLDING ACCOUNTABLE......SO FAR ONLY LOW LEVEL MANAGERS SEEM TO BE RESPONSIBLE.....WE ARE LOOKING FOR MORE!!!

Concealed from investors risks, terms, and improper pricing in CDOs and other complex structured products:

Citigroup - SEC charged Citigroup's principal U.S. broker-dealer subsidiary with misleading investors about a $1 billion CDO tied to the housing market in which Citigroup bet against investors as the housing market showed signs of distress. The proposed settlement would require a payment of $285 million by Citigroup that would be returned to harmed investors. (10/19/11)

Goldman Sachs - SEC charged the firm with defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter. (4/16/10)

Goldman Settled Charges - Firm agreed to pay record penalty in $550 million settlement and reform its business practices. (7/15/10)

ICP Asset Management - SEC charged ICP and its president with fraudulently managing investment products tied to the mortgage markets as they came under pressure. (6/21/10)

J.P. Morgan Securities - SEC charged the firm with misleading investors in a complex mortgage securities transaction just as the housing market was starting to plummet. J.P. Morgan agreed to pay $153.6 million in a settlement that enables harmed investors to receive all of their money back. (6/21/11)

Mizuho Securities USA - SEC charged the U.S. subsidiary of Japan-based Mizuho Financial Group and three former employees with misleading investors in a CDO by using “dummy assets” to inflate the deal’s credit ratings while the housing market was showing signs of severe stress. The SEC also charged the deal’s collateral manager and portfolio manager. Mizuho agreed to pay $127.5 million to settle the charges, and the others also agreed to settlements. (7/18/12)

Stifel, Nicolaus & Co. - SEC charged the St. Louis-based brokerage firm and a former senior executive with defrauding five Wisconsin school districts by selling them unsuitably risky and complex investments. (8/10/11)

RBC Capital Markets - SEC charged the firm for misconduct in the sale of unsuitable CDO investments to five Wisconsin school districts. The firm settled the charges by paying $30.4 million to be distributed to the school districts through a Fair Fund. (9/27/11)

Wachovia Capital Markets - SEC charged the firm with misconduct in the sale of two CDOs tied to the performance of residential mortgage-backed securities as the housing market was beginning to show signs of distress. Firm settled charges by paying more than $11 million, much of which will be returned to harmed investors. (4/5/11)

Wells Fargo - SEC charged Wells Fargo's brokerage firm and a former vice president for selling investments tied to mortgage-backed securities without fully understanding their complexity or disclosing the risks to investors. Wells Fargo agreed to pay more than $6.5 million to settle the charges. (8/14/12)

Made misleading disclosures to investors about mortgage-related risks and exposure:

American Home Mortgage - SEC charged executives with accounting fraud and misleading investors about the company's deteriorating financial condition as the subprime crisis emerged. Former CEO settled charges by paying $2.45 million and agreeing to five-year officer and director bar. (4/28/09)

BankAtlantic - SEC charged the holding company for one of Florida's largest banks and CEO Alan Levan with misleading investors about growing problems in one of its significant loan portfolios early in the financial crisis. (1/18/12)

Citigroup - SEC charged the company and two executives with misleading investors about exposure to subprime mortgage assets. Citigroup paid $75 million penalty to settle charges, and the executives also paid penalties. (7/29/10)

Commonwealth Bankshares - SEC charged three former bank executives in Virginia for understating millions of dollars in losses and masking the true health of the bank's loan portfolio at the height of the financial crisis. (1/9/13)

Countrywide - SEC charged CEO Angelo Mozilo and two other executives with deliberately misleading investors about significant credit risks taken in efforts to build and maintain the company's market share. Mozilo also charged with insider trading. (6/4/09)

Franklin Bank - SEC charged two top executives with securities fraud for misleading investors about increasing delinquencies in its single-family mortgage and residential construction loan portfolios at the height of the financial crisis. (4/5/12)

Fannie Mae and Freddie Mac - SEC charged six former top executives of Fannie Mae and Freddie Mac with securities fraud for misleading investors about the extent of each company's holdings of higher-risk mortgage loans, including subprime loans. (12/16/11)

Option One Mortgage Corp. - SEC charged the H&R Block subsidiary with misleading investors in several offerings of subprime residential mortgage-backed securities by failing to disclose that its financial condition was significantly deteriorating. The firm agreed to pay $28.2 million to settle the charges. (4/24/12)

Thornburg executives - SEC charged three executives at formerly one of the nation's largest mortgage companies with hiding the company's deteriorating financial condition at the onset of the financial crisis. (3/13/12)

TierOne Bank executives - SEC charged three former bank executives in Nebraska for participating in a scheme to understate millions of dollars in losses and mislead investors and federal regulators at the height of the financial crisis. Two executives settled the charges by paying penalties and agreeing to officer-and-director bars. (9/25/12)

TierOne auditors - SEC charged two KPMG auditors for their roles in the failed audit of TierOne Bank. (1/9/13)

Concealed the extent of risky mortgage-related and other investments in mutual funds and other financial products:

Bear Stearns - SEC charged two former Bear Stearns Asset Management portfolio managers for fraudulently misleading investors about the financial state of the firm's two largest hedge funds and their exposure to subprime mortgage-backed securities before the collapse of the funds in June 2007. (6/19/08)

Charles Schwab - SEC charged entities and executives with making misleading statements to investors in marketing a mutual fund heavily invested in mortgage-backed and other risky securities. The Schwab entities paid more than $118 million to settle charges. (1/11/11)

Evergreen - SEC charged the firm with overstating the value of a mutual fund invested primarily in mortgage-backed securities and only selectively telling shareholders about the fund's valuation problems. Evergreen settled the charges by paying more than $40 million, most of which was returned to harmed investors. (6/8/09)

Morgan Keegan - SEC charged the firm and two employees with fraudulently overstating the value of securities backed by subprime mortgages (4/7/10)

Morgan Keegan Settled Charges - Firm agreed to pay $100 million to the SEC and the two employees also agreed to pay penalties, including one who agreed to be barred from the securities industry. (6/22/11)

OppenheimerFunds - SEC charged the investment management company and its sales distribution arm for misleading statements about two of its mutual funds that had substantial exposure to commercial mortgage-backed securities during the midst of the credit crisis in late 2008. (6/6/12)

State Street - SEC charged the firm with misleading investors about exposure to subprime investments while selectively disclosing more complete information to specific investors. State Street agreed to repay investors more than $300 million to settle the charges. (2/4/10)

TD Ameritrade - SEC charged the firm with failing to supervise representatives who mischaracterized the Reserve Fund as safe as cash and failed to disclose risks when offering the investment to customers. Firm settled charges by agreeing to repay $10 million to certain fund investors. (2/3/11)

Others

Aladdin Capital Management - SEC charged the Connecticut-based investment adviser, its affiliated broker-dealer, and a former executive with falsely stating to clients that it had "skin in the game" for two CDOs. Aladdin and its broker-dealer agreed to pay more than $1.6 million combined, and the former executive agreed to pay a $50,000 penalty. (12/17/2012)

Bank of America - SEC charged the company with misleading investors about billions of dollars in bonuses being paid to Merrill Lynch executives at the time of its acquisition of the firm, and failing to disclose extraordinary losses that Merrill sustained. Bank of America paid $150 million to settle charges. (2/4/10)

Brooke Corporation - SEC charged six executives for misleading investors about the firm's deteriorating financial condition and for engaging in various fraudulent schemes designed to conceal the firm's rapidly deteriorating loan portfolio. Five executives agreed to settlements including financial penalties and officer and director bars. (5/4/11)

Claymore Advisors/Fiduciary Asset Management - SEC charged two investment advisory firms and two portfolio managers for failing to adequately inform investors about a closed-end fund's risky derivative strategies that contributed to its collapse during the financial crisis. Claymore agreed to distribute $45 million to fully compensate investors for losses related to the problematic trading, and Fiduciary Asset Management agreed to pay more than $2 million. (12/19/2012)

Colonial Bank and Taylor, Bean & Whitaker (TBW) - SEC charged executives at the bank and the major mortgage lender for orchestrating $1.5 billion scheme with fabricated or impaired mortgage loans and securities, and attempting to scam the TARP program.

Credit Suisse bankers - SEC charged four former veteran investment bankers and traders for their roles in fraudulently overstating subprime bond prices in a complex scheme driven in part by their desire for lavish year-end bonuses. (2/1/12)

KCAP Financial - SEC charged three top executives at a New York-based publicly traded fund being regulated as a business development company with overstating the fund's assets during the financial crisis. The executives agreed to pay financial penalties to settle the SEC's charges. (11/28/12)

UCBH Holdings Inc. - SEC charged former bank executives with misleading investors about mounting loan losses at San Francisco-based United Commercial Bank and its public holding company during the height of the financial crisis. (10/11/11)

Revised Stats (as of January 9, 2013) Number of Entities and Individuals Charged 153 Number of CEOs, CFOs, and Other Senior Corporate Officers Charged 65 Number of Individuals Who Have Received Officer and Director Bars, Industry Bars, or Commission Suspensions 36 Penalties Ordered or Agreed To > $1.53 billion Disgorgement and Prejudgment Interest Ordered or Agreed To > $756 million Additional Monetary Relief Obtained for Harmed Investors $400 million* Total Penalties, Disgorgement, and Other Monetary Relief $2.68 billion * In settlements with Evergreen, J.P. Morgan, State Street, TD Ameritrade, and Claymore Advisorshttp://www.sec.gov/spotlight/enf-actions-fc.shtml

____________________________________________________________________________________TAKE A LOOK AT WHERE THEY ARE AND WHAT THEY HAVE DONE. THE MARKET IS ALREADY AT THE SAME PLACE IT WAS IN 2007.......READY TO CRASH WITH LEVERAGE AND FRAUD.

The following list references all the rules that the Commission has proposed or adopted in connection with the Dodd-Frank Act. That Act contains more than 90 provisions that require SEC rulemaking, and dozens of other provisions that give the SEC discretionary rulemaking authority. Of the mandatory rulemaking provisions, the SEC has proposed or adopted rules for more than three-quarters. To date, the Commission has put in place a foundation for a framework that will support an entirely new regulatory regime designed to bring greater transparency and access to the securities-based swaps market, adopted rules that will result in increased oversight and transparency around hedge fund and other private fund advisers, gave investors a say-on-pay regarding executive compensation and established a whistleblower program which offers incentives for individuals with information regarding securities law violations to come forward. The SEC also has proposed a series of rules designed to improve the practices of credit rating agencies, including rules to limit the conflicts that may arise when NRSROs rely on client payments to drive profits and rules to monitor rating agency employees who move to new positions with rated entities. When the Commission proposes or adopts a set of rules, often those rules are contained in a single document, called a 'proposing release' or an 'adopting release.' Because the list below primarily cites releases, rather than the rules themselves, the number of entries on the list does not equal the number of rules the Commission has proposed or adopted. Most Recent Accomplishments

Adopted revisions to rules regarding due diligence for the delivery of dividends, interest, and other valuable property to missing securities holders. (Dec. 21, 2012) [§929W]

Provided to Congress a study on the rating process for structured finance products and the feasibility of an assignment system. (Dec. 18, 2012) [§939F]

________________________________________________________________________________IT IS IMPORTANT TO KNOW THAT THE SEC IS STILL ALLOWING CRIME TO PAY IN A BIG WAY AS THEY MOVE BEYOND THE NEED TO WARN BANKS THAT THEY ARE BACK ON THE JOB TO WHAT THEY ARE TRYING TO INSTITUTIONALIZE AS THE US RESPONSE TO CRIMINAL BEHAVIOR.

THE SEC WORKS FOR SHAREHOLDER PROFITS SO WILL NOT BE THE AGENCY TO PROTECT THE PEOPLE, BUT IT IS THE PENSION FUNDS THAT GET HIT OVER AND AGAIN AS WELL AS LOSES TO MUNICIPALITIES THAT MAKE GOVERNMENT COFFERS BARE FROM FRAUD.IF OBAMA DOES NOT APPOINT PEOPLE TO THESE JUSTICE AND REGULATORY POSITIONS THAT WILL MAINTAIN RULE OF LAW, HE WILL GO DOWN IN HISTORY AS THE SINGLE MOST CRIMINAL POLITICIAN IN HISTORY!!

Judge Takes Aim at Another S.E.C. Settlement By PETER J. HENNINGAssociated PressThe headquarters of the Securities and Exchange Commission in Washington, D.C.An obscure settlement announced in March 2011 has triggered questions from a federal judge about how much accountability the Securities and Exchange Commission should demand when it resolves a case.Following a path started by Jed S. Rakoff, a Federal District Court judge in Manhattan, Judge Richard J. Leon of the Federal District Court in Washington, D.C., has held up the settlement for nearly two years because of his demands for greater disclosure to ensure the public’s interest is protected.The case involves violations of the Foreign Corrupt Practices Act by International Business Machines from 1999 to 2008 for payments made to foreign government officials. The amounts involved were not significant, about $207,000 paid in Korea and a slush fund of undisclosed size to pay for overseas trips by Chinese officials.The settlement called for the company to pay $10 million. That included a civil penalty of $2 million, an amount that is small compared with some other recent overseas bribery cases. For example, Eli Lilly agreed last week to pay more than $29 million to settle with the S.E.C., with $8.7 million designated as a civil penalty.Unlike the recent reporting by The New York Times about widespread bribery paid by Wal-Mart to officials in Mexico, the I.B.M. case created hardly a ripple when the S.E.C. announced it. It looked like a routine matter in which the company promised not to violate the law again and paid its fine in much the same way that you would pay a parking ticket.That is, until Judge Leon took a hard look at the terms of the settlement. In a hearing last Thursday, Bloomberg reported, the judge raised questions about the deal, saying, “I’m not just going to roll over like the S.E.C. has.”The proposed settlement involved the “books and records” provisions of the overseas bribery law that requires companies to properly report their transactions and maintain adequate internal controls. To ensure it does not violate the law again, Judge Leon has demanded that I.B.M. provide annual reports on its compliance with the Foreign Corrupt Practices Act and any possible accounting violations in the company.The S.E.C. and I.B.M. defended the settlement and said that the additional reporting requirements would be too difficult for the company to comply. Judge Leon expressed some skepticism, asking “why, for one of the largest companies in the world, this is too burdensome.”The judge is no stranger to Foreign Corrupt Practices Act cases. Last year, he acquitted two defendants in the “Africa sting” case. The Justice Department accused 22 defendants of violations, relying on an undercover operative to record the defendants discussing payments to obtain fictitious contracts from an African government. Federal prosecutors eventually dropped the entire case after Judge Leon questioned the fairness of the prosecution.Judge Leon’s unwillingness to approve the settlement with I.B.M. raises the issue of the proper role the courts should play in overseeing how a government agency decides to resolve a case before trial.Last year, Judge Rakoff rejected a settlement between the S.E.C. and Citigroup over the bank’s marketing of a collateralized debt obligation tied to subprime mortgages. The settlement imposed a $285 million penalty, but it did not include an admission of any wrongdoing. The judge found that without some basis to find the bank had violated the law, the proposed consent judgment was “neither fair, nor reasonable, nor adequate, nor in the public interest.”Whether Judge Rakoff’s tough stand survives is questionable. The United States Court of Appeals for the Second Circuit is considering an appeal of his rejection of the settlement, having indicated in a preliminary decision that the S.E.C. was likely to succeed in compelling the court to approve it.Unlike Judge Rakoff’s broad demand for accountability, Judge Leon is taking a much narrower approach. He wants I.B.M. to report on its continuing compliance with the law and disclose other potential violations it discovers. Such a mandate does not require the company to admit to anything improper but only how it is meeting the requirements of the settlement.This case was not the first time I.B.M. had run afoul of the Foreign Corrupt Practices Act. In December 2000, the company settled a S.E.C. case by agreeing to not commit future violations of the same “books and records” provisions and paid a $300,000 penalty.So, Judge Leon may have good grounds for seeking information about I.B.M.’s continuing compliance with the law because it is a prior offender of the overseas bribery law.How this case will be resolved remains to be seen, as Judge Leon appears to be taking tough stance. Bloomberg reported that the judge told an S.E.C. lawyer at one point during the hearing, “I guess you want that $10 million judgment on your list of achievements this year. Well, it’s not going to happen.” It looks like the settlement will continue to languish until the S.E.C. can come up with some type of continuing disclosure requirement that is palatable to both I.B.M. and Judge Leon.The S.E.C. and I.B.M. could try to go over Judge Leon’s head by seeking a writ of mandamus from the United States Court of Appeals for the District of Columbia Circuit directing him to approve the settlement. But appellate courts are reluctant to issue such orders. A number of overseas bribery cases are filed in the Federal District Court in Washington, D.C., so trying to bypass Judge Leon could cause the S.E.C. problems in other cases.Whatever the resolution, the tussle is another signal that federal judges will not just rubber-stamp settlements by the S.E.C.Peter J. Henning, a professor at Wayne State University Law School, is the author of “The Prosecution and Defense of Public Corruption: The Law & Legal Strategies.” Twitter: @peterjhenning__________________________________________________________________________ISN'T IT COMFORTING THAT ALL OF THE LIKELY CONTENDERS FOR THE SEC------CHARGED WITH PROTECTING OUR INVESTMENTS ARE ALL BANKING INSIDERS. THESE GUYS WILL NOT CUT THE PUBLIC A BREAK. A LONGTIME WALL STREET EXECUTIVE IS THE FRONTRUNNER.

YOUR INCUMBENT IS WATCHING ALL OF THIS AND HERE IN MARYLAND I DO NOT HEAR ONE POL SAYING ANYTHING ABOUT THESE APPOINTMENTS.......YOUR INCUMBENT LIKES THIS!!!!

After Mary Miller, left, declined to be considered for S.E.C. chief, focus turned to candidates like, from left, Sallie Krawcheck, Robert Khuzami and Richard Ketchum.The field of candidates to run the Securities and Exchange Commission is shifting after a contender dropped out of the race.Mary J. Miller, a senior Treasury Department official, removed her name from consideration in recent days, according to several people briefed on the matter who were not authorized to discuss the selection process. While some Washington insiders had considered Ms. Miller a sensible choice, several people close to her said she was “not interested” in the job.With Ms. Miller withdrawing, Sallie L. Krawcheck, a longtime Wall Street executive, has emerged as a potential front-runner. Over the last year, she has become a familiar face in Washington, making the rounds with lawmakers to discuss consumer issues. The White House, which has been holding interviews for the position in recent weeks, is vetting a number of candidates with backgrounds in finance and government.Robert S. Khuzami, the S.E.C.’s enforcement director, is favored by some agency officials. Richard G. Ketchum, chairman and chief executive of the Financial Industry Regulatory Authority, Wall Street’s internal policing organization, is also a long-shot contender. The search is still in its early stages, and the candidates could change as the White House narrows its choices.Washington and Wall Street have been abuzz with speculation about the next S.E.C. chief since Mary L. Schapiro, the current chairwoman, announced her resignation on Monday. President Obama quickly named Elisse B. Walter, a Democrat who became an S.E.C. commissioner in 2008, as the new chief of the agency.But while Ms. Walter will step into the role on a full-time basis, she has told agency officials that she plans to serve for a short time. The White House, which faces more pressing cabinet-level nominations, is expected to name an S.E.C. successor next year.The president’s choice for the job will send a strong message to Wall Street and the broader financial markets. He could select a candidate with a strong regulatory hand and a critical voice to help police the industry.Or the Obama administration could decide on a compromise candidate like Ms. Krawcheck. In addition to having extensive Wall Street credentials, she is known for her independent streak and consumer advocacy efforts.Since leaving Bank of America in late 2011, Ms. Krawcheck, 48, has stepped up her presence in Washington and even hired an aide to help her navigate the political arena, according to people briefed on the matter who spoke on condition of anonymity.Last week, she met with leading members of the Senate Banking Committee, which oversees the S.E.C. It is possible Ms. Krawcheck is being considered for jobs other than head of the S.E.C., these people said.Still, she lacks government experience. Her banking résumé, too, may prove problematic given the anger of many people in Washington and on Main Street over Wall Street’s role in the 2008 financial crisis.Some liberal lawmakers are expected to raise concerns that regulators, including the S.E.C., are taking aim at some of Ms. Krawcheck’s past employers. She has been personally named, along with former colleagues, in litigation stemming from her time at Bank of America and Citigroup.Ms. Krawcheck started on Wall Street as an investment banker at Salomon Brothers, and switched a few years later to Donaldson, Lufkin & Jenrette. She made a name for herself as an analyst at Sanford C. Bernstein, a research firm, where she covered the banking industry and often issued negative calls on firms like Citigroup. In 2001, she was named chief executive of Bernstein, making her one of the top women on Wall Street.A year later, during a scandal on Wall Street, she was hired as head of research and brokerage at Citigroup, a step the bank took to improve its credibility. She worked her way up at Citigroup, becoming chief financial officer and eventually head of the wealth management division. But she left the bank in September 2008 after clashing with top executives who were reluctant to reimburse clients who had lost money on certain Citigroup investments.In 2009, Ms. Krawcheck landed at Bank of America, where she ran the wealth management group. Under her leadership, the unit posted steady results, a point of strength for the then-troubled bank. But Ms. Krawcheck was ousted from Bank of America in 2011 as part of a broader management shake-up.Since then, Ms. Krawcheck has refined her voice as a consumer advocate. On Twitter, she has drawn a significant following with her conversational style and posts on investment issues. She is on the board of Motif Investing, an online brokerage firm geared toward individual investors.She also writes a blog on LinkedIn. One recent dispatch, titled “What I Learned When I Got Fired (The First Time),” offered career guidance from her own rocky periods.“If you haven’t been fired at least once, you’re not trying hard enough,” she wrote. “As the pace of change in business increases, the chances of having a placid career are receding. And if in this period of rapid change, you’re not making some notable mistakes along the way, you’re certainly not taking enough business and career chances.”The next head of the S.E.C. faces a challenging agenda.Ms. Schapiro, who stepped down after a difficult four-year run, overhauled the agency and brought it back from the brink. During her tenure, she revamped the enforcement division and replaced the leadership team.But the new chief will have to tackle high-speed trading and complex financial products that have proved tough to monitor. At the same time, the S.E.C. must play catch-up on a series of rule-writing efforts required under the Dodd-Frank Act, the sweeping regulatory overhaul passed after the financial crisis. The agency is also trying to safeguard its rules from Wall Street’s legal challenges.“It’s still a very daunting task,” said Barbara Roper, director of investor protection at the Consumer Federation of America, an advocacy group.___________________________________________________________________________The American people are becoming more sophisticated in the politics of Wall Street and they know when the status quo is being maintained. It is why many democrats went to the polls to vote against their conscience in November…there were no choices. We have a severe case of the 3 monkey syndrome in our government now….see no evil;speak no evil; hear no evil and one would not expect Obama to change in mid-course. As you say he worked hard to make sure Wall Street remained unregulated, even going to Europe to decry tougher regulations on derivatives and even a bank tax to recover trillions in bank fraud. That is a team player!

So the American people are looking past the slate of candidates already put forward by the DNC…..candidates that are the status quo. We will be looking for and voting for new faces to lead the country back to first world status and free of the 3 monkey syndrome!

WASHINGTON — President Barack Obama has chosen Elisse Walter, one of five members of the Securities and Exchange Commission, to head the agency. Chairman Mary Schapiro will leave next month after a tumultuous tenure in which she helped lead the government’s regulatory response to the financial crisis.

Walter will take over at a critical time for the SEC, which is finalizing new rules in response to the 2008 crisis. She can serve through 2013 without Senate approval because she’s already been confirmed to the commission.

Obama will need to nominate a permanent successor before Walter’s term ends in December 2013. News reports have suggested that Mary John Miller, a top Treasury Department official, might be a potential candidate.

Walter, 62, a Democrat, was appointed to the SEC in 2008 by President George W. Bush. Earlier, she was a senior official at the Financial Industry Regulatory Authority, the securities industry’s self-policing organization. She served under Schapiro at FINRA, who led that group before becoming SEC chairman in January 2009.

“I’m confident that Elisse’s years of experience will serve her well in her new position,” Obama said in a statement.

Walter is likely to follow the path Schapiro established at the SEC, experts suggested.

At FINRA, Walter was Schapiro’s “right-hand person,” said James Cox, a Duke University law professor and expert on securities law. And as an SEC commissioner, Walter consistently voted with Schapiro on rule makings and other initiatives.

Cox said he wasn’t surprised that both of Obama’s choices to lead the SEC have come from an industry self-regulatory organization.

The Obama administration “is not an eager regulator of the securities markets,” he said.

Still, Schapiro’s challenges have probably been the most difficult any SEC chairman has faced, said John Coffee, a professor of securities law at Columbia University.

Schapiro took office after the Bernard Madoff Ponzi scheme and the financial crisis had eroded public and congressional confidence in the SEC. Since then, the agency has struggled with budgetary shortfalls.

Coffee said he thought Walter’s leadership of the SEC would closely resemble Schapiro’s.

Schapiro “has to be commended for working incredibly hard and against high odds” to maintain the agency’s budget, Coffee added. Still, the agency is “underfunded and overworked, and that’s not about to change.”

Reshaping the SEC

Schapiro will leave the SEC on Dec. 14. She was appointed by Obama in the midst of the worst financial crisis since the Great Depression. She also took over after the agency failed to detect the Madoff scheme.

Schapiro, 57, is credited with helping reshape the SEC after it was accused of failing to detect reckless investments by many of Wall Street’s largest financial institutions before the crisis. And she led an agency that brought civil charges against the nation’s largest banks.

In a statement Monday, Obama said, “The SEC is stronger and our financial system is safer and better able to serve the American people — thanks in large part to Mary’s hard work.”

But critics argued that Schapiro failed to act aggressively to charge leading individuals at those banks who may have contributed to the crisis. Consumer advocates questioned Schapiro’s appointment because she had led FINRA.

Under Schapiro, the SEC reached its largest settlement ever with a financial institution. Goldman Sachs & Co. agreed in July 2010 to pay $550 million to settle civil fraud charges that it misled investors about mortgage securities before the housing market collapsed in 2007. Similar settlements followed with Citigroup Inc., JPMorgan Chase & Co. and others.

The Goldman case came to symbolize a lingering critique of Schapiro’s tenure: No senior executives were singled out. The penalty amounted to roughly two weeks of earnings at Goldman. And Goldman was allowed to settle the charges without admitting or denying any wrongdoing, as were other large banks that faced similar charges.

Among the leading critics was U.S. District Judge Jed Rakoff, who questioned how the SEC could allow an institution to settle serious securities fraud without any admission or denial of guilt. Rakoff later threw out a $285 million deal with Citigroup because of that aspect of the deal.

Lawmakers and experts say Schapiro made the SEC more efficient, and they note that she fought for increased funding needed to enforce new rules enacted after the crisis. She often clashed with Republican lawmakers who had opposed the 2010 financial overhaul law and wanted to cut the SEC’s budget.

Schapiro also faced criticism over a key decision she made in response to the Madoff scandal. Madoff had been arrested a month before Schapiro took over at the SEC in January 2009.

Schapiro allowed her general counsel at the time, David Becker, to help craft the SEC’s policy for compensating victims. It was later discovered that Becker had inherited money his mother had made as a Madoff investor. Schapiro acknowledged in 2011 that she was wrong to have allowed Becker to play a key role in setting the policy.

The SEC’s inspector general concluded in a report that Becker participated “personally and substantially” in an issue in which he had had a financial interest. Some lawmakers complained that the affair further eroded the public’s trust in the SEC.

Cox, the Duke professor, said that after a strong first two years, the SEC under Schapiro became less effective.

“The wind was really taken out of (Schapiro’s) sails” by the political fallout from the Becker episode, Cox said. “I don’t think she really got her legs back under her after that.”

For example, Cox said Schapiro should have fought harder against legislation enacted in March that makes it easier for small start-ups to raise capital without having to comply immediately with SEC reporting rules.

Critics say the law went too far in removing SEC oversight, and might open the door to corporate scandals or to the sorts of deceptions that contributed to the financial crisis.

______________________________________________________________________________THE VOLCKER RULE WAS STRONG AS IT WAS ORIGINALLY WRITTEN AND PRESENTED TO CONGRESS FOR DEBATE. IT CAME THROUGH CONGRESS GREATLY REDUCED IN ITS REGULATORY POWERS AND NOW, AFTER TWO YEARS OF BANKS REWRITING THIS RULE IT BARELY RESEMBLES ITS ORIGINAL SELF. ITS NAMESAKE, VOLCKER HAS STEPPED AWAY FROM THE RULE AS WRITTEN BECAUSE HE SEES IT AS GUTTED. THE FEDERAL RESERVE'S POLICY OF FREE MONEY EXISTS IN PART TO GIVE THE BANKS FREE MONEY TO INVEST IN THE MARKET WITH THE GOAL OF CREATING THESE CAPITAL CUSHIONS NOW REQUIRED. IT IS QUITE LITERALLY A DEN OF THIEVES. IT IS INCREDIBLE HOW A NATION THAT HAD SOME FLAWS HAS FALLEN SO FAR IN JUST TWO DECADES.

YOU SEE BELOW THAT THIS RULE IS NOW OPEN FOR PUBLIC COMMENT. TAKE THE TIME TO DO THIS AS WE NEED EVERYONE BEING A PART OF THE SYSTEM. IT STARTS WITH HABITS LIKE THIS!

Mary L. Schapiro, chairwoman of the Securities and Exchange Commission, praised the new rules. Federal authorities moved a step closer to overhauling the derivatives market on Wednesday, as regulators proposed tougher standards for the nation’s biggest banks. Firms like Goldman Sachs and JPMorgan Chase would have to bolster their capital cushion and post additional collateral for certain derivatives trades. The Securities and Exchange Commission proposed the crackdown as part of a broader effort to rein in the opaque derivatives business, a main player in the financial crisis. “Together, these rules are intended to make the financial system safer, and the derivative markets fairer, more efficient, and more transparent,” Mary L. Schapiro, the agency’s chairwoman, said in a statement. Ms. Schapiro and the agency’s commissioners voted unanimously, 5-0, to advance the plan. It now enters a 60-day public comment period, after which the S.E.C. and other federal regulators must finalize the rules. The effort was part of the Dodd-Frank Act, the financial regulatory law passed in response to the financial crisis. The law mandated an overhaul of swaps trading by requiring that many such derivatives contracts go through a regulated clearinghouse that serves as a backstop in case one trading party defaults. Regulators, until recently, had little authority to set any rules for this market. The vote on Wednesday, Ms. Schapiro said, signaled that the S.E.C. had turned the corner in the derivatives overhaul. The agency has proposed or adopted nearly the entire “regulatory regime for derivatives.” The S.E.C., which has more Dodd-Frank duties than any other Wall Street watchdog, fell behind its fellow regulators in changing the regulations for swaps. The Commodity Futures Trading Commission and banking regulators proposed similar versions of the capital rules more than a year ago. The rules take aim at one of the great calamities of the 2008 financial crisis. In the lead-up to the crisis, banks bought billions of dollars in credit default swaps as protection on mortgage-backed investments. When the investments soured, the American International Group and other insurance companies that churned out swaps contracts lacked the capital to honor their agreements. Under the S.E.C.’s plan, banks and other so-called swaps dealers that arrange derivatives contracts would face a fixed-dollar capital threshold. The firms would also set aside a ratio equal to 8 percent of the collateral required for swaps contracts. The rules, Ms. Schapiro said, emphasize that swap dealers must hold liquid assets “readily available in times of crisis.” The rules separately require banks to post margin, or collateral, for riskier swaps that do not go through clearinghouses. The banks would use a complex calculation to collect cash or securities from their trading partners. Luis A. Aguilar, a Democratic commissioner, praised the effort. “We are considering these rules because a grave financial crisis,” he said, adding that the crisis “imposed immense costs on the American economy, with tragic effects on American workers and families.”

________________________________________________________________________________THIS SHOWS JUST HOW CORRUPT THE SYSTEM IS. WE ARE WATCHING OUR GOVERNMENT DISPLAY OPEN CORRUPTION WITH NO FEAR OF ANYONE STOPPING THEM. WITH NO JUSTICE DEPARTMENT AND CAPTURED ELECTIONS, THEY THINK THEY ARE FREE TO DO WHATEVER WILL ENRICH.

SEC Sues the One Rating Firm Not on Wall Street’s Take By William D. Cohan Sep 30, 2012 6:33 PM ET BLOOMBERG FINANCIAL

The Securities and Exchange Commission, it seems, has finally lost its mind. In April, motivated by what I consider pure maliciousness, the SEC initiated a “cease and desist” administrative proceeding it deemed “necessary for the protection of investors and in the public interest” against Egan-Jones Ratings Co., a privately owned, 20-person firm based in Haverford, Pennsylvania, and against its principal owner, Sean Egan. About William D Cohan William D. Cohan is the author of the recently released "Money and Power: How Goldman Sachs Came to Rule the World" and the New York Times bestsellers "House of Cards" and "The Last Tycoons."More about William D Cohan Egan-Jones, founded in 1995, is one of nine ratings companies that the SEC has accredited as “nationally recognized,” allowing the firm to rate the debt of sovereign nations, companies and asset-backed securities, among others. Notably, it is the only one of the nine that gets paid by investors instead of by the issuers of securities. The bigger and better-known ratings companies -- Standard & Poor’s (owned by McGraw-Hill Cos. (MHP)), Moody’s Corp. (MCO) and Fitch Ratings Ltd. -- are paid by the Wall Street banks that underwrite the debt securities of corporate issuers. That is, the companies are beholden to the sellers of the products they are supposed to pass judgment on, not the buyers. That’s akin to allowing the Hollywood studios to pay the nation’s film critics for their opinions. Shopping Around We all saw the result in 2007 and 2008. A major cause of the financial crisis was that S&P, Moody’s and Fitch, while being paid hundreds of millions of dollars by Wall Street, gave AAA ratings to complicated, risky securities that turned out to be anything but AAA. If a big bank didn’t like a proposed rating, it just shopped the deal until it found a firm that would provide something it liked better. Who can forget this memorable April 2007 instant-message exchange between two S&P analysts, Rahul Dilip Shah and Shannon Mooney? “Btw, that deal is ridiculous,” Shah wrote to Mooney about some mortgage securities they were asked to rate. “I know, right . . . model def(initely) does not capture half the risk,” she replied. “We should not be rating it,” he answered. “We rate every deal,” Mooney replied. “It could be structured by cows and we would rate it.” You would have thought that after the crisis exposed this kind of abhorrent behavior -- to say nothing of the obvious conflict of interest -- the SEC would have considered scrapping the issuer-pays model on ratings. You might have even thought the SEC would have sued S&P, Moody’s and Fitch for their reckless conduct. Alas, such obvious steps are out of the question at an SEC headed by Mary Schapiro, who previously led the Financial Industry Regulatory Authority, Wall Street’s self-financed, self-serving watchdog organization. (When Schapiro left Finra, it gave her a $9 million bonus). True, for a while, the SEC put on a good show of wanting to reform the ratings companies. It held round-table discussions with interested parties to discuss rectifying the horrific shortcomings of S&P, Moody’s and Fitch. Robert Khuzami, the SEC’s chief enforcement officer, suggested in an interview with Reuters a year ago that the SEC was considering a lawsuit against S&P for its role in the financial collapse. But in the end, nothing changed. The issuer-pays model is still the dominant architecture for the ratings firms. Debt Downgrade Now, incredibly, Egan-Jones is the sole rater that the SEC has decided to attack. The trouble for the firm started on July 16, 2011, when Egan-Jones downgraded the U.S.’s sovereign debt by one notch, to AA+ from AAA. Egan-Jones cited “the relatively high level of debt and the difficulty in significantly cutting spending.” Two days later, the SEC’s Office of Compliance Inspections and Examinations contacted the firm seeking information about its rating decision. (The next month, S&P also downgraded the U.S.’s sovereign debt, but neither Moody’s nor Fitch did.) Then, on Oct. 12, Egan-Jones received a call from the SEC notifying the firm of a Wells Notice, an indication that it was being investigated. On April 5 of this year, Egan-Jones again downgraded the U.S. sovereign debt, to AA from AA+. On April 19, leaks started emanating from the SEC that it had voted to start an “administrative law proceeding” against the firm. And on April 24, the SEC filed its complaint. Just what does the SEC object to so vehemently about Egan- Jones? The commission claims that on its 2008 supplemental application to be a “nationally recognized” ratings firm, Egan- Jones “falsely stated” that it had already rated the credit of 150 asset-backed securities and of 50 sovereign-debt issues. The SEC claims Egan-Jones “willfully made these misstatements and omissions to conceal the fact that it had no experience issuing ratings on ABS or government issuers.” The SEC intends to fine Egan-Jones and to possibly censure Sean Egan -- neither move would be good for business. Egan says the SEC is making a mountain out of a molehill. He says the paperwork requirements to comply with the Credit Rating Agency Reform Act, which had been passed by Congress in 2006, was still being worked out, and that the SEC has had no problem with his firm’s annual applications since then. His lawyer, Alan S. Futerfas, told the Wall Street Journal that the SEC knows that Egan did rate the securities in question but it is “saying he didn’t disseminate it publicly.” Futerfas continued: “It’s a very technical argument the SEC is using; it’s not substantive. There’s nothing in this complaint that suggests or alleges that any rating was without integrity or was not accurate or was not predictive.” If he is right, that raises a question: Is the SEC retaliating against Egan and his firm for downgrading the U.S. sovereign debt? Principled Stand Egan told me he is determined to fight the charges because “the issuer-paid rating firms were identified as a significant source” of the worst economic catastrophe since the Great Depression, and yet the SEC’s “response has been to hobble, in any way possible, the most vocal counterbalance to those inflated ratings.” Egan is standing on principle even though his legal fees will probably far exceed a fine if he loses. “Anybody who looks at this would realize that this is wrong,” he said. “It provides an opportunity for a spotlight on what’s been going on over the recent past, and hopefully it will change so that it’s a more even playing field.” Don’t get your hopes up for that, Mr. Egan. (William D. Cohan, the author of “Money and Power: How Goldman Sachs Came to Rule the World,” is a Bloomberg View columnist. The opinions expressed are his own.) Read more opinion online from Bloomberg View. Subscribe to receive a daily e-mail highlighting new View editorials, columns and op-ed articles. Today’s highlights: the editors on the Obama administration’s transparency shortcomings and on the resurgent European debt crisis; Noah Feldman on the Supreme Court’s torture case; Albert R. Hunt on Obama’s biggest liability in debating Romney; Simon Johnsonon how to assess the soundness of banks; Richard Vedder asks why colleges are too big to fail. To contact the writer of this article: William D. Cohan at wdcohan@yahoo.com. To contact the editor responsible for this article: Tobin Harshaw at tharshaw@bloomberg.net.

____________________________________________________________________________ONE OF THE EASIEST CRIMES BANK EXECUTIVES CAN BE CHARGED IN THIS MASSIVE FRAUD IS THE SARBANES-OXLEY ACT. WE HEARD EARLY ON FOR CALLS TO NEUTRALIZE THIS ACT AS BANKERS AND THEIR POLITICIANS KNOW THAT ALL BANKS ARE GUILTY OF ACCOUNTING FRAUD. YET, NO CHARGES AND NO LAWS TO STRENGTHEN OVERSIGHT.

When Will the SEC Finally Go After the Auditors? By Jonathan Weil Sep 27, 2012 1:29 PM ET Bloomberg Financial

Something very unusual happened at the Securities and Exchange Commission this week: The SEC accused three former bank executives of committing fraud by deliberately understating their company's loan losses during the financial crisis. Such accusations have not been made often in recent years. Unless you happen to live in Nebraska, you probably haven't heard of Lincoln-based TierOne Corp., which had about $3 billion assets when it failed in 2010. Yet it's an important story because of what it shows about the state of securities-law enforcement in the U.S. About Jonathan Weil Jonathan Weil joined Bloomberg News as a columnist in 2007, and his columns on finance and accounting won Best in the Business awards from the Society of American Business Editors and Writers in 2009 and 2010.More about Jonathan Weil On Tuesday the SEC said it had reached settlements with the company's former chief executive officer and chairman, Gilbert Lundstrom, and another former senior executive, who will both pay fines. (Per the usual custom, neither admitted or denied any wrongdoing.) A third former executive is contesting the agency's claims, which include allegations of egregious accounting violations.Several times in recent years the SEC's enforcement division has seemed to bend over backwards to avoid accusing anyone at a failed financial institution of committing accounting fraud. To name a few: When the SEC filed fraud claims against former executives of Countrywide Financial Corp., IndyMac Bancorp, Freddie Mac and Fannie Mae, it accused them of making false disclosures. But it made sure not to allege that any of the companies' books were wrong; none of them ever admitted to any accounting errors.At Countrywide, for instance, the SEC accused former CEO Angelo Mozilo of failing to disclose known loan losses. If the SEC's allegations against him were true, then the company's financial reports by definition must have contained misstatements -- except the SEC never alleged so in its complaint against him. He committed disclosure fraud, the SEC said, not accounting fraud.The main beneficiary of the SEC's approach in such cases has been the Big Four auditing firms, as I wrote in a column last year. They can claim their audits were fine, because there was never any official finding that the numbers were incorrect. That has helped the firms enormously in class-action litigation brought by investors.TierOne's auditor was KPMG LLP, which also was the auditor for Countrywide. (The other Big Four firms are Ernst & Young LLP, PricewaterhouseCoopers LLP and Deloitte & Touche LLP.) Neither KPMG nor any of its personnel were named as defendants in the SEC's complaint this week. One of the allegations against the former TierOne executives was that they lied to KPMG auditors. Under the Sarbanes-Oxley Act, passed in 2002, lying to an auditor is a punishable offense.Does this mean KPMG got a pass from the SEC? My guess is yes. An SEC spokesman, John Nester, declined to say. A spokesman for KPMG, Manuel Goncalves, declined to comment.There is somebody out there, however, who believes KPMG should be held liable for failing to catch TierOne's accounting chicanery. TierOne's Chapter 7 bankruptcy trustee earlier this year sued the accounting firm, accusing it of negligence and breaches of fiduciary duty. KPMG has denied the allegations and asked that the matter be resolved in arbitration proceedings rather than in court. It was TierOne's regulator, the U.S. Office of Thrift Supervision, that caught the bank's accounting manipulations -- not KPMG, which continually blessed TierOne's financial statements and resigned as auditor in 2010 only weeks before the bank failed.The financial crisis was in large part about financial institutions' cooked books. A big reason that companies such as Lehman Brothers, Fannie Mae and Freddie Mac failed was that investors could tell from the outside looking in that their balance sheets were bogus. Even Hank Paulson, the former Treasury secretary, said as much in his memoir. (The SEC never brought a single enforcement action against a former Lehman executive.)That's why it's so disappointing to look at the SEC's own highlights of the various lawsuits it has brought in connection with the financial crisis -- and to realize that not one of those lawsuits has been against an auditor. The government didn't just bail out the big banks back in 2008 and 2009. It bailed out their accounting firms, too. This can't be good for investors' confidence in the long run.(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)

______________________________________________________________________________WE HAVE SO MANY PROBLEMS WITH THE EXCHANGES AS TO MAKE THE ENTIRE SYSTEM SUSPECT FOR THE AVERAGE INVESTOR. THE COMPUTER DRIVEN HIGH-FREQUENCY TRADES BASICALLY MAKES IT IMPOSSIBLE FOR ANYONE TO ASSESS AND RESPOND TO MARKET FLUX. THEY ARE PLACING OUR PENSIONS IN THIS MARKET AND NO ONE CAN KNOW SHORT-TERM STABILITY

U.S. regulators and securities professionals should re- examine rules implemented in 2007 that transformed stock trading in the U.S., according to a NYSE Euronext (NYX) executive. The proliferation of venues where investors can buy and sell shares, advances in trading speed spurred by computers, and the use of increasingly complex orders by high-frequency firms warrant a coordinated assessment, Joseph Mecane, head of U.S. equities at NYSE Euronext, said Sept 19 at a conference. The analysis should focus on Regulation NMS, the set of rules meant to foster competition and speed trading in shares listed on the New York Stock Exchange, he said. The Senate Banking Committee was scheduled to hold hearings yesterday on electronic trading. Last week, the Big Board, owned by NYSE Euronext, agreed to pay $5 million to settle Securities and Exchange Commission charges that it sent price and other data to feeds used by brokers and high-frequency companies faster than it did to the public. The SEC should arrange a “series of market structure roundtables to discuss a lot of these items as an industry and to have a holistic recommendation or series of legislative changes coming out of these issues,” Mecane said. “Each of these items is interrelated. I don’t think they get addressed, largely because you can’t address them in isolation.” Buy and sell orders for U.S. equities are executed on 13 stock exchanges, several alternative venues, more than 40 dark pools and through other broker-dealer systems. Scrutiny of equity infrastructure has increased this year after a series of computer malfunctions raised questions about the stability of modern market structure. . ____________________________________________________________________________THERE WERE NO LAWS IMPLEMENTED DEALING WITH THE REVOLVING DOOR IN FINANCIAL REGULATION. WE SEE INVESTMENT FIRMS SENDING THEIR EMPLOYEES TO WORK IN THE GOVERNMENT FOR A FEW YEARS AND THEN THEY RETURN TO THE INDUSTRY THEY WERE SUPPOSED TO REGULATE. IT IS THE MOST GLARING PROBLEM AND OBAMA HAS LET THIS PROLIFERATE.

The world’s largest hedge-fund advocacy group has named a former U.S. Securities and Exchange Commission official its chairman as the $2.1 trillion industry grapples with increased regulation. Kathleen Casey, who stepped down as a Republican SEC commissioner last year, was appointed non-executive chairman of the Alternative Investment Management Association, the London- based lobbying group said in an e-mailed statement yesterday. She replaces Todd Groome, a former Deutsche Bank AG (DBK) executive and adviser to the International Monetary Fund, whose term expired. Casey, 46, takes the post as global regulators implement rules ranging from restrictions on who can invest in hedge funds in Europe to U.S. requirements that funds undergo routine SEC inspections and disclose their leverage and investments to the government. European watchdogs are also considering whether to stiffen oversight of so-called shadow banking, a term that describes all financing activities not performed by banks. From 2006 through 2011, Casey served as one of the five SEC officials who vote on whether to adopt new regulations for the finance industry and to punish individuals and companies for violations of securities laws. Her tenure coincided with the meltdown of the U.S. housing market that led to the collapses of Bear Stearns Cos. and Lehman Brothers Holdings Inc. in 2008. The resulting global financial crisis prompted the U.S. Congress to approve the 2010 Dodd-Frank Act, which increased regulation of banks and hedge funds. Casey last year voted against a rule mandated by Dodd-Frank that requires hedge funds to register with the SEC. The rule passed 3-2 with Democratic SEC commissioners supporting it and Republicans in opposition. AIMA has 1,300 corporate members ranging from hedge funds to accounting firms and prime brokerage units at banks. Casey’s term as chairman lasts for two years.

_______________________________________________________________________________WE WANT TO EMPHASIZE THAT ATTORNEY GENERAL HOLDER HAS ANNOUNCED THAT NO CRIMINAL CHARGES WILL BE FILED ON THESE FOLKS. WE ARE HEARING TIME AND AGAIN THE DEFINITION OF FRAUD IS VAGUE AND ENFORCEMENT CASES CANNOT BE MADE. YET, WE HAVE SEEN NO ATTEMPTS TO STRENGTHEN THESE FRAUD LAWS. REGARDLESS, THERE IS BROAD CONTENTION THAT PROSECUTIONS ARE THERE FOR THE TAKING WITH PLENTY OF LOW-HANGING FRUIT. WE WILL NEED A NEW ATTORNEY GENERAL NEXT OBAMA TERM.

The civil securities fraud charges filed by the Securities and Exchange Commission against six former executives of the mortgage giants Fannie Mae and Freddie Mac signal an aggressive turn in the pursuit of cases tied to the subprime mortgage crisis.By naming two former chief executives, Daniel H. Mudd of Fannie Mae and Richard F. Syron of Freddie Mac, the S.E.C. shows it is willing to take on those who were responsible for each company’s decision to plunge into subprime mortgages that crippled them. Filing fraud charges creates a big splash, but like any enforcement action, a number of questions remain. Here are a few issues.What Was the Fraud? The S.E.C. charged the most serious violations in its arsenal: intentional fraud under Rule 10b-5 and, for Mr. Mudd and Mr. Syron, the filing of false certifications of the corporate financial statements. The crux of the cases is that the executives misled investors about Fannie and Freddie’s exposure to subprime mortgages by playing down these low-end loans even though their value on the books ballooned in the two years before the housing market collapsed in 2008. The decision to focus on what the executives said to investors and in regular S.E.C. filings means the cases will turn on what other information was publicly disclosed to determine whether the statements were in fact misleading. A crucial issue will be whether the statements of senior executives were material to investors if there was other information readily available showing the actual state of the company’s mortgage portfolio. If you look at the financial statements, the volume of detailed information about their mortgage holdings was almost mind-numbing. The S.E.C. case is not about those figures, or whether the companies properly accounted for their mortgage portfolios. Fannie and Freddie settled S.E.C. complaints over their accounting practices in 2006 and 2007, so it is unlikely there will be significant questions raised about how each reported its mortgage portfolio. Instead, the case will focus on what constitutes a “subprime” mortgage, a term that does not have any fixed meaning. In a pie chart accompanying the complaints, the S.E.C. portrays how the disclosures about Fannie and Freddie’s exposure to subprime mortgages was minuscule compared with the total amount of such loans on the books. The S.E.C.’s theory appears to be essentially an application of the “duck test”: if it swims like a duck and quacks like a duck, then it’s a duck. The complaint relies on internal documents and e-mails about the types of loans the two companies considered to be subprime, which turned largely on whether the borrower had a weak credit history indicating a higher risk of default. If loans fell into that category, then the S.E.C. alleges they should have been categorized as “subprime.” The difficulty the S.E.C. will face is proving that broad statements made by the executives about the subprime mortgage holdings were misleading when the financial statements gave a wealth of information about each company’s portfolio. The executives are likely to focus on the minutiae of the reports to show that the statements were not misleading, and that what is called “subprime” is open to conflicting interpretations. In effect, the S.E.C. will be looking at the forest – that subprime meant any mortgage carrying a heightened risk of default – while the defendants will points to all the trees (and even shrubbery) in the financial statements to show that the market had sufficient information about risks.Why Are There No Criminal Charges? The public outcry over the lack of criminal charges from the financial crisis in 2008 will not be assuaged by these cases, which come on top of more than $150 billion in federal aid to prop up the companies. Freddie Mac disclosed earlier this year that the Justice Department had dropped its criminal investigation of the firm, and it is unlikely there will be a criminal prosecution of the Fannie Mae executives based on the allegations lodged by the S.E.C. The civil case has the advantage of a lower burden of proof – by a preponderance of the evidence rather than the “beyond a reasonable doubt” standard for criminal cases. A criminal prosecution would require stronger evidence of intent to defraud, and there does not appear to be any large stock sales or personal enrichment, beyond the high salaries most corporate executives receive. The civil case may well devolve into a battle of the experts over what constitutes a subprime mortgage and whether the disclosures in each company’s financial statements gave investors enough information to discern the risk. That kind of evidence does not make for a good criminal case, so the Justice Department likely deferred to the S.E.C. to avoid the reasonable probability of a “not guilty” verdict that would tarnish its image.Who Will Pay the Legal Fees? Although they were government-sponsored enterprises, Fannie and Freddie operated much like any other large corporation, which included giving their executives broad indemnification rights that requires the companies to pay their legal fees. In addition, the defendants can have those fees advanced as long as they promise to repay the money if they are found not be eligible for the money. The Subcommittee on Oversight and Investigations of the House Financial Services Committee held a hearing in February that considered the right to indemnification of former Fannie Mae executives involved in the accounting case settled in 2007. The written testimony of the acting director of the Federal Housing Finance Agency, which oversees the two companies, stated that it was committed to following the indemnification provisions provided to its executives by paying reasonable lawyer’s fees. Acknowledging the legal obligation to front the legal fees means that all the defense costs will be paid by the government in a case in which the government accuses them of significant violations. Indeed, six different legal teams will be working on the case because each defendant will have separate counsel because of the conflict of interest rules. Discovery in securities fraud cases can take years, and a complex case like this will involve millions of pages of documents. DealBook reported that the S.E.C. took more than 100 depositions during its investigation, and many of those are likely to be repeated during the pretrial phase of the case, when defense lawyers have an opportunity to examine witnesses that is not afforded during the investigation. If the case proceeds to trial, the legal fees could easily exceed $10 million per defendant.Is This a Harbinger of Future Cases? In announcing the two complaints, Robert S. Khuzami, the S.E.C.’s enforcement chief, pointed out that the agency had filed 38 cases related to the financial crisis, including charges against executives at two leading subprime mortgage firms, Countrywide Mortgage and New Century Financial. But none of those have captured the public’s imagination as the type of signature prosecution that will assess blame for the economic harm suffered by the country. Although the S.E.C. has pursued cases against Wall Street firms, like Goldman Sachs and Citigroup, over toxic securities tied to subprime mortgages, no senior executives from those firms were named, only mid-level employees with little management responsibility. By accusing Mr. Mudd and Mr. Syron of fraud, the S.E.C. may be signaling that it will pursue senior executives for their role in the crisis. The S.E.C. investigation of Fannie and Freddie took a little more than three years, which is typical for this type of case. The remaining Wall Street firm that was a focus of a high-profile investigation that has not yet resulted in any charges is Lehman Brothers. An interesting question is whether the S.E.C. will go after any executives from that firm, whose bankruptcy is seen as the trigger for the financial crisis in 2008, or if the charges against the Fannie and Freddie executives will prove to be the high-water mark in enforcement actions.Peter J. Henning, who writes White Collar Watch for DealBook, is a professor at Wayne State University Law School.__________________________________________________________________________Levitt Says SEC Money-Fund Punt a ‘National Disgrace’: Tom Keene By Laura Marcinek and Tom Keene - Aug 23, 2012 1:49 PM ET Bloomberg Financial

U.S. Securities and Exchange Commission Chairman Mary Schapiro’s abandonment of her quest to impose tougher rules on money-market mutual funds is a “national disgrace,” said former SEC Chairman Arthur Levitt.

“There’s clearly a need to do something about money-market funds,” Levitt, 81, said today in a Bloomberg Radio interview with Tom Keene and Ken Prewitt. “Everything else is marked to the market. This should be marked to the market in the interest of investors. The fact that Mary Schapiro couldn’t get her three members of the commission to support this is really a national disgrace.”

10:55 Aug. 23 (Bloomberg) -- Arthur Levitt, former chairman of the U.S. Securities and Exchange Commission, talks about SEC Chairman Mary Schapiro's abandoned quest to impose tougher rules on money-market mutual funds after three of the four other commissioners didn't support her effort. Levitt, a Bloomberg LP board member, speaks with Erik Schatzker and Stephanie Ruhle on Bloomberg Television's "Market Makers." (Source: Bloomberg)

55:08 June 21 (Bloomberg) -- U.S. Securities and Exchange Commission Chairman Mary Schapiro testifies before the Senate Banking Committee about the regulation of money-market funds. Schapiro faced skeptical lawmakers from both parties as she defended her campaign to overhaul money-market rules. (Source: Bloomberg)

Three of the four other SEC commissioners didn’t support a four-year effort to make money funds more stable, Schapiro said in a statement that urged other policy makers to take action. That could move the fight over how to regulate the industry’s $2.6 trillion in funds to the Financial Stability Oversight Council, a panel of regulators created by the Dodd-Frank Act.

“This is a national issue,” Levitt said. Protecting investors “is a matter that the president should weigh in on. The Federal Reserve Board took that position. The Treasury Department is supportive of money-market regulation.”

Schapiro has worked to make money funds safer since the collapse of the $62.5 billion Reserve Primary Fund in September 2008. She has argued that the funds’ stable share price encourages investors to flee at the first sign of trouble because it allows those who react quickly to sell their shares at $1 each even if the net asset value has dropped below that.

Buck Breaking “We’ve had a number of instances where funds have broken the buck, and the funds have made up for it because they know that the whole faith and confidence in the fund market would be damaged,” said Levitt, a board member of Bloomberg LP, parent of Bloomberg News. “Today, the margin of error is narrower than it’s ever been.”

Schapiro’s plan was supported by one other commissioner, Democrat Elisse B. Walter. Republicans Troy Paredes and Daniel M. Gallagher opposed it, while Democrat Luis A. Aguilar, a former attorney for Atlanta-based fund manager Invesco Ltd. (IVZ), had signaled he didn’t support the plan without saying whether he would at least approve that it be put out for public comment.

Schapiro “agrees it’s tragic and will work with other government agencies on money-market fund reforms to better protect investors and taxpayers,” said John Nester, an SEC spokesman.

________________________________________________________________________________WE ARE WATCHING THE SAME PATTERN OF PLACING THE BANKING INTERESTS AS REGULATORS OF THE INDUSTRIES THEY SPENT THEIR LIVES WORKING.....OBAMA IS SAYING LOUDLY AND STRONGLY--------I'M NOT MESSING WITH THESE GUYS!!!!! THEY CAN DO WHATEVER THEY WANT!!!!! I'M SURE MR. CHAMP WILL BE AT THE THROAT OF THESE SERIAL CRIMINALS.July 5, 2012, 2:56 pmS.E.C. Names Director of Investment Management By PETER LATTMANThe Securities and Exchange Commission on Thursday named Norman B. Champ III, a former hedge fund general counsel, as its director of investment management.He replaces Eileen Rominger, a former Goldman Sachs senior executive who is leaving the post after 18 months on the job. Ms. Rominger announced her retirement last month.Revolving DoorMr. Champ, 49, has been with the S.E.C. since 2010, most recently serving as its deputy director of the S.E.C.’s compliance inspections and examinations unit. That office has received increased attention because of new requirements that hedge funds and other large private investment firms register with the commission. His office has also played a key role in implementing certain provisions of the Dodd-Frank financial reform law.In his new role, Mr. Champ will oversee the regulation of mutual funds, hedge funds and other money management businesses.“Norm has proven himself to be a natural leader and an expert at managing programs that bolster our financial markets and protect investors,” said Mary L. Schapiro, the S.E.C’s chairwoman, in a statement.Mr. Champ, a native of St. Louis, spent 10 years as the general counsel at Chilton Investment Company, a large hedge fund based in New York before joining the S.E.C. He started his legal career practicing at Davis Polk & Wardwell.A graduate of Harvard Law School, Mr. Champ has taught a class on investment-management law at his alma mater, where he also has a conference room named after him. He is currently teaching that course to 120 colleagues at the S.E.C.______________________________________________________SEC Proposed RulesWe encourage the public to submit comments on the following proposed rules during the comment period. For detailed instructions, please read How to Submit Comments. Proposed rules currently available include:SEC Proposed Rules RSS FeedPublic Comments on SEC Regulatory Initiatives Under the JOBS ActThe Jumpstart Our Business Startups Act includes provisions that require the SEC to undertake various initiatives, including rulemaking and studies touching on capital formation, disclosure and registration requirements.Members of the public interested in making their views known on these matters, even before official comment periods may be opened, are invited to submit those views via the links below. The Commission will post all submissions on this page of the Commission's Internet Web site. All submissions received will be posted without change; we do not edit personal identifying information from submissions. You should only make submissions that you wish to make available publicly.Members of the public who wish to submit official comments on particular rulemaking proposals should submit comments during the official comment period through the Commission's website as described in the notice of the proposal published in the Federal Register.

Title I — Reopening American Capital Markets to Emerging Growth Companies

See also: Jumpstart Our Business Startups Act http://www.sec.gov/spotlight/jobsactcomments.shtml06/25/2012 _________________________________________________________________________SEC Proposes Rules To Help Prevent And Detect Identity TheftFOR IMMEDIATE RELEASE2012-34Washington, D.C., Feb. 28, 2012 – The Securities and Exchange Commission today announced a rule proposal to help protect investors from identity theft by ensuring that broker-dealers, mutual funds, and other SEC-regulated entities create programs to detect and respond appropriately to red flags.The SEC issued the proposal jointly with the Commodity Futures Trading Commission (CFTC). Section 1088 of the Dodd-Frank Act transferred authority over certain parts of the Fair Credit Reporting Act from the Federal Trade Commission (FTC) to the SEC and CFTC for entities they regulate. The proposed rules are substantially similar to rules adopted in 2007 by the FTC and other federal financial regulatory agencies that were previously required to adopt such rules.Additional Materials

The rule proposal would require SEC-regulated entities to adopt a written identity theft program that would include reasonable policies and procedures to:

Identify relevant red flags.

Detect the occurrence of red flags.

Respond appropriately to the detected red flags.

Periodically update the program.

The proposed rule would include guidelines and examples of red flags to help firms administer their programs.The proposal will be published in the Federal Register with a 60-day public comment period.# # #http://www.sec.gov/news/press/2012/2012-34.htm

____________________________________________________________________________EVEN THOUGH THIS HAS BEEN IN THE WORKS FOR TWO YEARS THEY STILL HAVEN'T SET RULES FOR MOST OF THIS REFORM BILL SO IT IS NOT TOO LATE AND WE NEED TO HEAR FROM THE PEOPLE NOT JUST THE FINANCIAL INDUSTRY. YOU DON'T NEED TO KNOW TECHNICAL JARGON.......DO YOU SEE YOUR POLITICIAN'S NAME AMONG THE COMMENTS? WHY NOT?JUST SAY 'THE PEOPLE WANT THE MOST STRINGENT TERMS'SHOUT LOUDLY AND STRONGLY------THEY WILL NOT CARE OTHERWISE!!!!!Public Comments on SEC Regulatory Initiatives Under the Dodd-Frank ActThe Dodd-Frank Wall Street Reform and Consumer Protection Act includes provisions that require the SEC to undertake various initiatives, including rulemaking and studies touching on many areas of financial regulation.Members of the public interested in making their views known on these matters, even before official comment periods may be opened, are invited to submit those views via the email addresses below. While the Commission has responsibilities under other provisions of the Act, the list below covers major regulatory topics and other more immediate matters. The Commission may add additional email addresses in the future.Members of the public who wish to submit official comments on particular rulemaking initiatives should submit comments during the official comment period that starts with the notice of the initiative published in the Federal Register.The Commission will post all submissions on this page of the Commission's Internet Web site. All submissions received will be posted without change; we do not edit personal identifying information from submissions. You should only make submissions that you wish to make available publicly.